An analyst from Hana Financial Investment Corp. warned against a short-term bubble in bio shares on Tuesday.

The stock market bubble warning comes after shares of Celltrion and its two affiliated firms shot back up after plunging the previous week. A stock market bubble occurs when investors drive the price of a share much higher than its actual value, increasing the chance of a market crash.

“Stocks of Celltrion trio – Celltrion, Celltrion Healthcare and Celltrion Pharm-- have deepened suspicions about the possibility of the realization of the 'Minsky Moment' of KOSDAQ,” said Kim Yong-gu, an analyst at Hana Financial Investment Corp. “There is a need for risk management for the KOSDAQ biopharmaceutical shares as the stock market bubble might burst.”

Minsky Moment is when a market fails or falls into crisis after an extended period of market speculation or unsustainable growth.

“Most of the bubbles that happened in the history of financial speculation went through a catastrophic failure after experiencing the Minsky Moment," Kim added. “The paths between the Minsky general model and KOSDAQ biotech share are similar."

Kim noted the price of Korea’s bio-shares as a ground for ordering specific risk management.

“Korea’s bio-shares are the most expensive in the world based on Morgan Stanley Capital International (MSCI) BenchMark,” Kim said. “Also, there were no outstanding points for both technology and financial performance in comparison to its global peers.”

Kim also cited the listing of Celltrion in the main bourse and its inclusion in the KOSPI 200 index. Celltrion has emerged as the fourth largest company by market capitalization in Korea.

“Questions remain about whether Celltrion can align itself with firms such as SK Hynix, Hyundai Motor, POSCO and KB Financial,” Kim said. “This is not a problem confined to Celltrion, but to every bio-share listed on the KOSDAQ market.

Another reason for risk management was the U.S. interest rates.

Kim predicted that if the U.S. Federal Reserve raised interest rates in March, the focus of the global stock market would shift to value stocks rather than growth stocks such as bio-stocks.

“The Federal Reserve’s interest rate hike risk, which is likely to go through, will spread a proactive stress response throughout the domestic and international stock markets,” Kang added. “This suggests that global style and sector leadership will shift from growth stocks to high-value stocks.”

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